Pressure on corporate medicine in the ÜSA:- In the USA there is a rising tide of public and medical revulsion. The not for profit community and church providers are rallying to oppose corporate health care. Politicians and attorney generals are taking legal and political action to control PACMAN activity. Legislation protecting community hospitals and limiting the worse abuses of patients is being fought over in most states. Corporations are investing vast sums in lobbying to prevent this. Most threatening for corporations are the massive fraud investigations targeting health care and the grim determination of the FBI to put an end to the extortion of US citizens. An article in the NY Times 31 March 1998 entitled "Health Care Industry Seeks Congressional Relief" describes the intense lobbying and the vast funds being spent by corporations in an attempt to induce politicians to emasculate the False Claims Act, which according to the article has been "the primary tool used to recoup Government losses from fraud" for the last decade. All this has put great pressure on corporate provider and managed care companies in the USA. They are following Tenet/NME and Columbia/HCA in rapidly diversifying internationally to cushion the impact.

Responding by going international:- It is therefore no surprise that the pressures on managed care and corporate medicine in the USA have generated a rash of articles extolling the financial opportunities in foreign countries including developing countries in Africa, South America, Asia and even Russia. Analysts are preparing reports advising corporations where the opportunities lie. Any place with a moderately stable government is a target. These articles explore the financial opportunities and also the problems of introducing US style corporate medicine and managed care into local cultures, making it pay so that shareholders can make a profit. Advice is given on the best places to invest in hospitals.

Few challenge the critical deficiencies in the managed care system or in the provision of health care purely for profit. Managed care is promoted as a means not only of reducing costs but also of increasing standards of care. Businessmen who know nothing of standards glibly talk of quality. The tragedy is that many of these people genuinely believe what they are saying. They are sufficiently far removed from the coalface of medicine to delude themselves. Words substitute for reality. Most of the following articles are a reflection of this sudden interest in overseas investment.

Despite its title Modern Healthcare which published most of these has little to do with health care. It is primarily a business and management journal. Modern Healthcare published its first international edition in November 1997 and is to publish a second in May 1998. The first targeted opportunities in Europe, Australia, South America, China and some African countries. Prepublication advertising indicates that the second international edition will target South Africa and Asian countries. This trend is also reflected by the recent decision of the Joint Commission for the Accreditation of Healthcare Organisations (JCAHO) to go international and accredit international hospitals. Like other US accreditation bodies it has been severely criticised for being in the corporate pocket and attempts have been made to control this.

Australia is welcoming them:- The last article from the Melbourne Age is only one of many which reveal the determination of our Australian politicians to bring foreign corporations, primarily from the USA into Australia to force corporate medicine and managed care onto us. They claim that they are not introducing the US system. They claim that our regulations, our policing, our contracts and our accreditation systems will prevent a repeat of the US situation. They have not responded to my pointing out that the US system is heavily regulated, heavily policed, supposedly the world leader in accreditation and has a well staffed FBI concentrating on health care fraud. All of these are well funded. In contrast the Australian structures are inexperienced, ill informed, poorly staffed and underfunded.

How we see it:- These articles are all written in the business idiom and sound plausible and exciting when read within a business or corporate frame of reference. The reader should don his or her medical hat, stand back and ask how much all this has to do with medical care, how much for concern about human suffering and how much is pure greed. Is this any more than a search for opportunities to make money out of the predicament of suffering people who need help, and the confusion of gullible new governments who look to the US, as the leader of the modern democratic world for guidance.

The articles:- This is once again the front page to a set of news clippings which support the arguments advanced here. As the articles are copyright I cannot put them on the www.

Contents

Introductory comments

This page consists of a list of published articles with short comments.
There are two main sections

The Pressures on Corporate Medicine

The Corporate International Flight

The Catholic Church "comes out" against for profit medicine. Two extracts from Modern Healhcare July 1997 and October 1997.

The Catholic Church has now taken a firm and uncompromising stand against for profit medicine, the pope referring to "numerous situations in which the centrality and dignity of the human person are ignored and trampled upon, as occurs when health care is regarded in terms of profit and not as a generous service" Reports included with other documents indicate how effectively community and church health care organisations have banded together to study and publicise the adverse consequences for the community and for patients of selling hospitals to corporate predators.

U.S. hospital giant hit by widening federal probe Reuters News 18/7/97

This short report came soon after the most extensive raids on hospitals in US history. It describes the grim determination of the FBI to target and wipe out corporate health care fraud in the USA. As in the case of Mayne Nickless fraudulent arrangements have become the way of doing health care business in the USA. Stopping it is going to cut into profits. Mayne Nickless transport operations became much less profitable when their practices were restricted by court injunctions. They are now selling these and concentrating on health care. They are spreading internationally. US corporations are responding to the same pressures by moving out of the USA.

US Congressional Record

The Raiders are coming - and I don't mean the football team -- 10/9/96

The pursuit of profit: Non-profit hospitals become the big public giveaway of the nineties - 9/1/97

The Accreditation accountability act of 1997 - 13/2/97

These extracts from the proceedings of the US congress are representative of the laws being passed to contain corporate excesses, limit PACMAN activity, remove accreditation bodies such as JCAHCO from corporate control, and prevent the misuse of accreditation procedures in marketing. Other regulations more directly address specific managed care problems such as contracts with doctors and outpatient mastectomies for cancer. State legislatures are legislating along similar lines.

Note Representative Stark's statement. "Health care is fundamentally different from most other goods and services. It is about the most human and intimate needs of people, their families and communities. It is because of this crucial difference that each of us should work to preserve the predominantly non-profit character of our health care delivery system" . I have tried to explain this to medical associations to regulators and politicians over the last 7 years but to little avail.. The most resistant to persuasion and the most determined to impose market solutions are those doctors who have embraced economic rationalist ideology. Our federal health minister is a prime example.

While this seems surprising, it becomes logical when we realise the stark dilemma faced by doctors who have adopted an ideology which confronts their entire professional tradition. Unless they can force medicine into the ideological basket they must accept that their beliefs are fallible. Once they have invested their careers in these beliefs then this becomes untenable for them. Ideology trumps evidence and common sense every time.

Doctors Filling M.B.A. Programs : With Profession Changing, an Effort to Be Masters of Their Fate New York Times 25/12/95

This reports the way in which doctors are rushing to do MBA and other business courses. While a few are doing so to understand and combat the corporate problem most see the corporate future and want to establish their positions within it. They will more readily adopt commercial attitudes. Wealth and power are with the manager, not with the people who care. Those with ambition must be part of it. How many more Dr Wooldridges will we see?

MHI: EMERGING MARKETS: DEVELOPING COUNTRIES OFFER BURGEONING OPPORTUNITIES FOR PRIVATE-SECTOR INVESTMENT Modern Healthcare Nov. 3, 1997

This article describes some of the reports evaluating the opportunities for corporate health care profits in foreign countries. Note the recommendation to get a core of key local doctors on side. "Tie down a core group of local physicians with excellent training and reputation and with ties to the community". Corporations know that to succeed some doctors have to be persuaded into corporate patterns of thought, preferably those with big practices. They can then be promoted as leaders. The corporate marketing machine will be used with their support to label and destroy medical critics.

Note the positive use of "some aggressive new behaviour", as if aggression had something to do with medical care. Note also that Vista Healthcare which is based in Singapore is a prime mover. It consists almost entirely of past Tenet/NME staff who worked in Singapore and Australia. It is now acting as a consultant to Tenet/NME in their new international expansion. The past international conduct of Tenet/NME and these staff is reviewed in the article "The Impact of Financial Pressures on Clinical Care". Note Ford's advice not to wave the American flag but work under the umbrella of a local operator using US corporate know-how. Note the advice on how to deflect criticism based on what has happened in the USA. The last paragraph promotes the international opportunities for the sort of integrated systems which have been so financially rewarding but which have lent themselves to fraud.

MHI: THE NEW WORLD OF MANAGED CARE Modern Healthcare Nov. 3, 1997

This article reviews opportunities. Note the remarkable claim by the insurance company Aetna that managed care techniques "will enhance care right off". This is not what US doctors and nurses are saying. It is as misleading and dishonest as the tobacco companies. Note "But consultants and entrepreneurs, many of whom talk up the possibilities of global managed care with a kind of Wild Western enthusiasm, say the markets are." and later "the real action is about to begin". Note the defensive claim of "avoiding the pitfalls of the US system" but then soon after the reference to contracts with doctors and the introduction of gatekeepers. These are the key problems in the US managed care system. (see reports on Kaiser's gatekeeper systems and standards in Kaiser hospitals). Note that they are having difficulty in cracking the European market. The World Medical Associations (WMO) offices are in Europe. The WMO, the Vatican in Rome, and many European medical associations are now in possession of large numbers of US documents describing what has happened there.

Note that governments can be "silos of opportunity" if you understand their "pain" and play on it. Our Dr Wooldridge is an excellent example of the success of this strategy. There are "opportunities galore". The advice is that "--- business can help governments learn new ways of delivering health care efficiently." Like the advice given in the previous article to target influential doctors, this one reports that a group of gullible Russians were flown to Kaiser's US facilities for indoctrination. In February Columbia/HCA did the same with doctors in South Australia, but they spoke English and made some independent inquiries of their own. Note that projects in Asian countries involving physician training provide a jumping off point. It is likely that all of these activities are done under the umbrella of well funded corporate marketing departments.

Note the comments about the reputation of managed care and how to "downplay" the term. The comments about the fears of overseas doctors about managed care and standards of care are interestingly brushed off by suggesting that they read articles which are "out of context". The reality is that a number of doctors from many countries including members of the Australian Medical Association have gone to the USA and have carefully examined and seen what is happening in the USA. They have analysed the forces at work. While the outward manifestations of managed care may differ they see no difference in the way these same basic commercial forces act in different settings. Managed care advocates discount the genuine concerns of the profession for the future of medical care and for the patients as "self interest".

MHI: MADE IN AMERICA: U.S.-STYLE HEALTHCARE AND FOREIGN CULTURES CAN MAKE A POOR MIX Modern Healthcare Nov. 3, 1997

This is more of the same explaining the difficulties in introducing US money making strategies into local markets. Note the reference to Brazil "But the real problem is a lack of managerial depth" and "the professional administrator does not exist". Note the other comments along these lines. I am reminded of a talk by a US administrator invited to help our hospital a few years ago. He expressed the same sentiments and was horrified by the lack of properly trained health administrators in Australia. Many would argue that the prime problem in health care in the USA and Australia, is dominance of corporate style managers and their commercial US based patterns of thought. The main problem in developing a system which is functional for patients is the blind belief of most trained managers in the infallibility of corporate and managerial solutions. Their training is based on US business schools of thought.

Note that to Kaiser Permanente, the managed care company at the centre of controversies in California and Texas it is "- - mostly a matter of applying what's known about payment incentives to specific circumstances". Medicine in these countries is to be governed as it is in the USA by using financial incentives and disincentives to control the care given by doctors to patients. One wonders what the doctors in these countries would think if they could read English and understood corporate strategies.

MHI: INVESTING IN HEALTH REFORM: FUND MANAGER SEES GLOBAL OPPORTUNITY TO MAKE MONEY ON COST CONTAINMENT, OUTCOMES IMPROVEMENT Modern Healthcare Nov. 3, 1997

Note again how US corporate health care and managed care are glibly linked to "improving clinical outcomes" as well as containing costs. Corporate language does not address the concerns sweeping the USA and contrary evidence. Note the jargon "health reform analyst". This is likely to be a businessman or manager. Note that "HealthReform Partners" is an asset manager looking for investment. Note the statement that "HealthReform Partners is the only investment group looking at the cross-sectors of health care reform". This is the new language of medicine. The words directly contradict and confront reality and are accepted in its place. (see comments by John Ralston Saul). Note the comment in the last paragraph about "global opportunities" and the assertion that other countries are where the US was a few years ago and need the same solution. Look at the real non-financial costs of that solution in the USA. It is up to us to find and set in place better solutions than this.

MHI: GLOBAL DIRECTION: LONGTIME LEADER ADDRESSES FUTURE OF INTERNATIONAL HOSPITAL FEDERATION Modern Healthcare Nov. 3, 1997

This is simply a report on changes in staffing at the IHF and some historical and policy issues. Note the assertion that medicine is one of the worlds great growth industries. Note the emphasis on management issues and the contribution of the US to the founding, continuation and philosophy on the IHF. "Americans should not overlook their role and importance in the development of health care administration"

MHI: HURDLING A GREAT WALL: U.S. COMPANY OPENS CHINA'S FIRST FOREIGN-RUN HOSPITAL AFTER FOUR YEARS' EFFORT Modern Healthcare Nov. 3, 1997

This describes the success of a US company which is investing in health care in China.

MHI: SETTING STANDARDS: JCAHO CONSULTS WITH FOREIGN COUNTRIES ON HEALTHCARE PERFORMANCE RULES Modern Healthcare Nov. 3, 1997

That foreign countries are being encouraged to follow the US accreditation procedures is a mixed positive and negative. The US has been seen as a leader in accreditation practices and accreditation bodies. Corporations have supported the public's faith in accreditation. US accreditation is highly regarded internationally and US practices are emulated. The reality is more disturbing. I have spoken to some of those who worked in the hospitals where the fraud occurred and it is clear that the JCAHO did not function effectively, a view shared by the Texas attorney general who prosecuted Tenet/NME in 1991.

In 1992 a US House of Representatives Inquiry revealed that the body accrediting psychiatric hospitals was funded by corporations and most of its directors were corporate. They were investigating the abuse and misuse of patients in hospitals owned by Tenet/NME and many other corporations. Reviews of accredited hospitals had not been performed or were ineffective. They functioned primarily as marketing tools for corporate hospitals.

During the last few years there has been intense criticism of the JCAHO because of its perceived failure to address and maintain real standards. Its emphasis on process rather than practice has been ineffective. A recent independent review of accreditation practices found that accreditation bodies were largely funded and/or owned by corporations and were useful to them for marketing. Even the JCAHO was found to be accountable to corporations rather than the public. Representative Stark has introduced legislation to transfer control and accountability of accreditation bodies to citizens rather than corporations.

A further report in Modern Healthcare April 6, 1998 is entitled "GOING GLOBAL: JCAHO TO ACCREDIT FOREIGN HEALTHCARE ORGANIZATIONS"

It states

"The Joint Commission has changed its longstanding policy against accrediting foreign healthcare organizations and is now preparing to provide accreditation services wherever they are requested around the world."

and

"The four major accrediting bodies in the world-the Australian Council for Accreditation, the Canadian Council for Accreditation, the JCAHO and the New Zealand Council for Accreditation-all support this program, Timmons said."

All common sense and caution is abandoned. Profit reigns supreme. Evidence and democratic processes are ignored as the corporate jugernaut and its legitimising paraphernalia roll relentlessly across the world. We live in a corporatist world and no one dare challenge the corporate prescriptions we are to live by. We are expected to place our lives in the care of these groups. They have included corporate criminals who advertise that they are certified as safe by subserviant corporate bodies. These accrediting bodies have failed miserably in their duties to the public. Alternative systems are not considered.

MHI: IHF CONGRESS HIGHLIGHTS: A SAMPLING OF THE OFFERINGS AT THIS YEAR'S MEETING IN MELBOURNE, AUSTRALIA Modern Healthcare Nov. 3, 1997

This article describes this conference, reflecting the sudden international interest.

...AND RETURNS TO FOREIGN HOSPITAL BUSINESS Modern Healthcare Oct. 6, 1997 P6

Tenet/NME is attempting to return to the international market which it left with its tail between its legs only 2 years ago. It is using Michael Ford, the previous president of its international division as a consultant. Ford has been with Vista healthcare in Singapore for some months doing the ground work. He was in charge of Tenet/NME's operations in Singapore and Australia at the time of the events which forced them back into the USA.

MHI: PRIVATE VS. PUBLIC: IN AUSTRALIA, HEALTH INSURANCE COMPANIES COMPETE WITH THE COUNTRY'S FREE, HIGH-QUALITY MEDICARE PROGRAM Modern Healthcare Nov. 3, 1997

The opportunities in foreign countries are examined in several articles. This article for US business readers critically reviews the health system in Australia and the conflict between the profession on the one hand and medical insurers and government on the other.

Hospitals may go to foreigners The Age Melbourne 07 December 1997

This article shows how eager Australian governments are to bring foreign corporations into Australia and subject Australians to the pleasures of US corporate medicine and managed care. Ron Williams warned us that they would do this in 1992 suggesting that "Remission was Impossible". He was despondent about the consequences. Australia still retains some vestiges of its democratic heritage. We must use the remaining opportunities for public dissent to prove him wrong. We will not do so by looking the other way and pretending that we are not threatened.

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Modified 20 April 1998 J.M. Wynne
minor adjustments April 2000